Easily manage employment in Oregon

Payroll management in Oregon

Oregon has a strong economy supported by industries such as technology, agriculture, manufacturing, and healthcare. With state-specific payroll regulations, including a tiered minimum wage system, progressive income tax, and paid leave requirements, employers in Oregon must ensure compliance with both state and federal payroll laws. Understanding these regulations is crucial for smooth payroll operations and compliance.

Payroll breakdown in Oregon

Employers in Oregon must adhere to both federal and state payroll regulations regarding wages, taxes, and benefits. Below is an overview of key payroll components:

Minimum wage and overtime

• Minimum wage: Oregon’s minimum wage follows a tiered system based on location:
• $15.45 per hour in the Portland Metro area.
• $14.20 per hour in Standard counties.
• $13.20 per hour in Nonurban counties.
• Overtime rules:
• Oregon follows federal overtime laws, requiring employers to pay 1.5 times an employee’s regular rate for hours worked beyond 40 hours in a workweek.
• Certain industries, such as manufacturing, have daily overtime rules for shifts exceeding 10 hours.
• Some exemptions apply based on job classification and industry.

State income tax

• Oregon has a progressive state income tax system, with rates ranging from 4.75% to 9.9%, depending on income levels.
• Employers must withhold state income tax and remit it to the Oregon Department of Revenue.
• Oregon has no state sales tax.

Unemployment insurance (UI) tax

• Employers must contribute to Oregon’s Unemployment Insurance (UI) program, managed by the Oregon Employment Department.
• The UI wage base in Oregon is $50,900.
• UI tax rates vary based on an employer’s experience rating and range from 0.9% to 5.4%.
• New employers typically pay a 2.1% UI tax rate.

Workers’ compensation

• Oregon law requires all employers to carry workers’ compensation insurance to cover medical expenses and lost wages for employees injured on the job.
• Employers must obtain coverage through a private insurance carrier or the Oregon Workers’ Compensation Division.

Paid family and medical leave

• Oregon Paid Leave: Employees are eligible for up to 12 weeks of paid family and medical leave, funded by employer and employee payroll contributions.
• Employers must withhold and remit contributions to the Oregon Employment Department.

Payroll tax filing and payment deadlines

• Employers must register for an Oregon Business Identification Number (BIN) with the Oregon Department of Revenue.
• State withholding tax returns must be filed quarterly or annually, depending on employer classification.
• UI tax reports must be submitted quarterly to the Oregon Employment Department.
• Payroll tax payments can be made electronically through the Oregon Revenue Online (ORO) portal.

Quick facts: Important considerations for employers

• State minimum wage compliance: Oregon’s tiered minimum wage system requires employers to determine compliance based on location.
• Final paycheck rules:
• If an employee is terminated, employers must provide the final paycheck by the end of the next business day.
• If an employee resigns with notice, the final paycheck must be provided on the last working day.
• If an employee quits without notice, the final paycheck is due within five business days or on the next payday, whichever comes first.
• New hire reporting: Employers must report new hires to the Oregon New Hire Reporting Center within 20 days.
• Paid sick leave: Oregon requires employers to provide one hour of paid sick leave for every 30 hours worked, up to 40 hours per year.
• Payroll recordkeeping: Employers must maintain payroll records for at least three years to comply with state and federal laws.
• Right-to-work state: Oregon is not a right-to-work state, meaning employees may be required to join a union if applicable.

Run payroll in Oregon with Remote

Managing payroll in Oregon requires careful attention to state-specific regulations, including minimum wage compliance, UI tax requirements, and workers’ compensation laws. Employers must stay informed about tax rates, wage laws, and reporting deadlines to ensure smooth payroll processing and avoid penalties.

The good news is, you can pay anyone, anywhere — from your team in the office to your team abroad, all with Remote Payroll. To see just how easy global payroll can be, book a demo with Remote today.